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New Zealand can’t put the urban genie back in its bottle

By Peter Nunns, on August 29th, 2014

Although the majority of New Zealanders have lived in towns and cities for almost a century, it sometimes seems like we’re in denial that we live in an urban nation. This unease came to the fore during the debate over the Auckland Plan and the Unitary Plan. As it turns out, some people are uneasy about Auckland’s emergence as a large and increasingly sophisticated city.

At that time, the NZ Herald published several articles calling for a “national population strategy” to forestall further growth in Auckland. Here’s one example from May 2013:

Redirecting people away from settling or living in Auckland would be a positive step. A good example is in Invercargill where students pay no fees. The fees at Auckland learning institutes should be increased and those elsewhere removed or reduced significantly.

[…]

As so much of the population increase is likely to come from an increase in births, a decrease is urgent. Incentives need to be provided such as free contraception, especially to those under 20 years of age. The provision of family benefits regardless of whether you have two or 10 children should be looked at.

Short of putting contraceptives in the water supply we are unlikely to do much about our rate of natural increase – so realistically any policy needs to focus on migration patterns, particularly within New Zealand – the so-called “northward drift”.

Realistically we cannot talk about Auckland in isolation from the rest of New Zealand. We have no national population strategy – though some useful work has been done in the past. Neither do we have a regional development strategy, an essential mechanism for achieving a more equitable sharing of economic and population growth.

This is a seductive idea, but it won’t work. Developing policy to redistribute growth is bloody hard without spending massive amounts of money and tightly controlling economic activity. If we seriously tried to subsidise or regulate growth away from Auckland, we’d probably just end up misallocating resources and reduce our wellbeing. As urban economist Edward Glaeser is fond of pointing out, good policy should aim to help poor people rather than poor places.

Fortunately, we don’t have to speculate about the consequences of regional growth policies, as we have a real-world historical example to draw upon. From the 1930s to the 1980s, NZ tried a massive policy experiment – it invested heavily in regional development and used regulatory controls to spread investment and employment around the country.

Looking back on it, the reach of these regulations and investments is extraordinary. So, for example, you had:

Economically costly production and export subsidies for farmers were propping up uneconomic farms. By 1984, subsidies accounted for almost 40% of the average sheep and beef farmer’s income.

The Transport Licensing Act 1931, which banned trucks from moving goods more than 150 kilometres before its repeal in 1982. This imposed high costs to distance, encouraging small-scale local production rather than centralising plants.

Regulations that virtually prohibited the opening or closing of meatworks and other rural processing plants between the 1930s and 1980s. When the Patea meatworks closed in 1982, they were the first meatworks to close in half a century – which is bizarre when you realise how much cheaper refrigerated shipping got over this period.

A policy of distributing major industrial facilities around the country – an aluminium smelter for Bluff, a steelworks for Glenbrook, a pulp and paper mill for Kawerau, etc.

The use of the Railways Department and Forest Service as rural employment schemes.

So it’s worth asking whether these policies worked. We know that they were economically costly – but did they actually succeed in redistributing growth from Auckland to the regions?

The data suggests that the answer is no. Here’s a graph of population growth in New Zealand’s major cities from 1926 to 2006 from Grimes and Tarrant (2013). As it shows, Auckland’s population growth began diverging from Wellington and Christchurch early on – probably after World War II.

Furthermore, the almost total removal of rural subsidies during the 1980s doesn’t seem to have accelerated Auckland’s divergence. In fact, Auckland’s annual per capita growth rate seems to have fallen after deregulation, although growth slowed more in other places.

In short, we should accept the reality of urban growth: People want to live in Auckland and start businesses here for good reasons, and we can’t (and shouldn’t) try to stop them. The idea that we can put the urban genie back in its bottle is sheer fantasy. If we try, we’ll only make ourselves worse off.

Our only choice is whether we will have a good city – an interesting and prosperous place – or a crippled, unsuccessful city. Given that, our focus should be on making the best urban places we can. We need Auckland to be a dynamic and liveable city rather than an overgrown small town. And that means investing and planning in a city-like way: getting ambitious about rapid transit, celebrating our mixed-use public spaces, and accepting that density and amenity aren’t mutually exclusive.

35 comments to New Zealand can’t put the urban genie back in its bottle

Well put Peter. Interestingly, the “northward drift” thing seems to have more or less run its course anyway, at least regarding internal migration to Auckland. I’ve been meaning to do a post looking at this.

Not sure I agree with the insinuation that the likes of the Kawerau mill should have been somewhere else. The mill had to go beside the forest, and the forest is at Kawerau. Same with the Glenbrook mill – it had to go where the ironsands are, and the ironsands are at Glenbrook. Has nothing to do with regional development as such. Industry throughout NZ is sited where the raw materials are. This process has not reversed, it continues today. Fonterra are not building their big new plants in 2014 in downtown Auckland. They are building them, and creating thousands of jobs in the process, at Whareroa, Pahiatua, Darfield, etc.

As to whether or not we are better off under the old regulated ways, or as things are today, simply look at the end point. Has the gap between rich and poor decreased or increased? Is it easier or harder to earn a living by working 40 hours a week? Have income levels kept pace with our international counterparts? Is housing more or less affordable today? I would suggest New Zealanders are worse off today than they were 30 years ago. And by a significant margin. The old regulations were designed to keep money in the pockets of New Zealanders. Now it goes offshore to global businesses, who are increasingly setting up offices in Auckland to administer that transfer of wealth from us to them.

I agree with you about inequality in NZ Geoff. But I don’t think that it was subsidising the provinces that created a more equal society up until the 1980s.

Books like “23 Thing They Don’t Tell You About Capitalism” and the film “Inequality For All” place the credit squarely with higher taxes and the ability that gave to government to provide top class (and free) education and health to its citizens. This in turn allowed children from less privileged backgrounds a greater opportunity to rise up the economic ranks.

Let’s not forget that under Eisenhower (hardly a Socialist) the top tax rate in the US was 91% and that was a time when the US was very successful as an economy.

Not a very popular opinion in neoliberal NZ but the evidence they present is very compelling and I am yet to find a critique that counters their evidence. The only counter seems to be that it is against the neoliberal philosophy as that seems to have been elevated to the status of religious doctrine that must be adhered to regardless of the effect on society as a whole.

I really recommend anyone interested in the issue of inequality to look at the arguments made.

And the aluminium smelter had to be close to where the power generation was.

I question whether it is more financially prudent to build infrastructure in Auckland that already exists in many of the regions, or might be more cheaply built in the regions. However, our situation is really no different to Sydney and London.

If you look at the graph of Auckland you can see a reason why the original Auckland Harbour bridge planners probably go it wrong on traffic volumes.

[and also I suspect that explains the big uptick in growth between ’56 and ’76 – the North Shore opening up – courtesy of 4 then after 10 years, 8 lanes of bridge/motorway.]

If the bridge planners used the growth/trends up to 1956 in their planning/sizing then that would have predicted a maximum population of 1 million in 2006, assuming a linear growth pattern, and if they used the rate from ’36 to ’46 as their model (more likely), then that would have suggested a maximum population growth of 600 thousand by 2006.

So their models were simply too conservative, and did not allow for even (what seems now, to be a modest) 300% growth rate over 60 years (some 2.5% per-annum by my back of the envelope maths).

I would suppose though they would not have seen that was the case, and as Wellington’s & Christchurch growth has been far more modest up to and since it would have been seen that these would be a likely model for the Auckland growth patterns to follow – but it has not been the case.

If you compare the growth from ’46 to ’06, as a simple linear line, most of the growth of population over that time has actually been below that line, touching it only at ’46, ’76 and ’06.

But using that line for a simple linear extrapolation of ’46 to ’16 would suggest about 1.4 million by 2016 which is not too far from the reality as I recall right now.

Interestingly though the population growth in Auckland from ’76 to ’06 (last 30 years) is almost an identical repeat of the growth pattern from ’46 to ’76 (prior 30 years) – that is a slower rate going in for 1st 10 years and then a much higher growth rate for the next 20 years. [and both these are itself a pattern of the previous 20 years from ’26 to ’46 – which suggests this may be the current pattern of population growth in Auckland – repeating the cycle every 30 years give or take].

Which if true, would suggest that whatever population we do have in 2016 e.g. 1.4 million, is the tail end of the slow growth period, and it will begin another sudden spurt up for the next 20 years up to 2036 + beyond.
So those predictions of 2 million plus by 2040 may not be too far wrong.

Planning is a tricky thing as Yoda said “the future, clouded is”, but one thing is certain, we can’t simply plan for/assume that all these future new residents will (a) live on the Shore or “out west” or “out south” and/or (b) will all want to get around the place by private car

We simply don’t have the road space/land to waste of money to burn to enable that sort of explosive growth any more. Both as a region or a country.

Great observations Peter. When I was growing up in Auckland during the Second World War and enjoyed visits to Wellington (12 hours of smoky railway) and Christchurch there was really no noticeable size difference in terms of amenities in each of these cities although Wellington did have a couple of those marvellous things called ‘escalators’ which were completely unknown in Auckland and suburban trains which took you to places like Johnsonville, Plimmerton and Woburn. In Rugby Otago, was pre-eminent before the drift north of young people eroded their player base.

It has been evident for a long time that Auckland is going to be, far and away, New Zealand’s major and only international city. Furthermore excessive and continuing motorway development will not add to the quality of life in this city. Regretfully, there is emerging a big difference of opinion between, local desires of the best way forward and what national government considers is best for Auckland — and national government hold the purse-strings.

I foresee a clash of wills and in the long term (or not so long term) believe that national government will have to give way.

Re the Vancouver photo – I will miss it here if/when I come back – I was walking back from Stanley park through the west end at about 9pm and it’s just the nicest place – you have a mix of small complexes, old houses (though few and ultra-expensive) and tower highrises, but it’s so gree with trees everywhere, the streets are so quiet – it feels extremely residential – take a look – http://goo.gl/DJbgoM – now see the density – http://goo.gl/1p5s2l – only a 10-15 minute walk to downtown.

This Street is a dedicated ‘quiet’ bike street with separated lanes further east and west. Ton’s of people around, lots to do, quiet and safe – Auckland could be this, but I worry that it never will be with recent political decisions. Newton, Mount Eden, Ponsonby and grey lynn should be Auckland’s West End, but they’ve cocked it up.

I was in Vancouver not long ago and happened across a fellow kiwi discussing panoramic photos of Vancouver with a gift shop owner. The kiwi asked the local “how could you let them them get away with that?!”, referring to the apartments and waterfront developments. The shop owner was flabbergasted, couldn’t even understand the question to begin with. The idea that the city would be better without any people or stuff in it was totally foreign to them. I guess Auckland 2040 take holidays too: “had the most amazing time in Vancouver, great city, meanwhile back home…”

“The Transport Licensing Act 1931, which banned trucks from moving goods more than 150 kilometres before its repeal in 1982.” – not quite. The distance limit was first 30, then 40, miles, and the final 150 km limit (from 1977) survived (as a permit requirement rather than an absolute limit) until 1987, I think.

The trends have been running for a long time, but I’d be wary of assuming something inevitable about them, Periods of large scale migration (post-war and since around 19990), and high levels of manufacturing protectionism from the 1930s to 1980s, hugely boosted Auckland’s absolute and relative size. The protectionism has largely gone, and it would be interesting to see the impact of materially low level of non-NZer immigration.

Another factor in Auckland’s diverging growth is Auckland Airport, which handles most of NZ’s long-haul flights. Also of note was that before deregulation and privatisation took place, Wellington was head office central.

First of all, those were opinion pieces in the Herald, not reportage. I’m glad that isn’t Herald’s position.
Second, a national population strategy? Sounds rather fascist to me. Do any countries other than China have such a thing?
IF Auckland’s disproportionate growth is defined as a national problem, then incentives to live elsewhere might make some sense, at least for immigrants. However, the current incentive is totally useless. Based on my experience 7 years ago, Immigration awards extra points if you are *not* locating in Auckland. I got those points because I was going to Whangarei, I was there for a year and got my butt to Auckland as soon as an opportunity arose. So much for incentives.
(Note that those numbers that the press plays up about immigration include temporary immigrants who ultimately go home or elsewhere, so the numbers are not indicating permanent population increase. Lot’s of churn.)
However, I have at least a mild concern about Auckland outstripping all other cities. It’s starting to look like what is called a growth pole, typical of third world countries that have one very dominant city at the expense of the provinces. It’s not an equitable or efficient way to develop a *country*, and it makes it harder to manage growth and social conditions in the city. Auckland is hopefully prepared better than that.
If Auckland in 2040 is Vancouver, count me in. I continue to think it’s a good model.

Many countries have a massively dominant single city – London for example. It’s not really that uncommon. Whether it’s ideal is another question.
IMO, weather is also one of the main factors in people deciding where to live. You can invest in Invercargill all you like but it will still be too cold for me.

I remember when this debate was had before and London was only one of many examples. In fact I would say in Europe it is the norm other than countries like Germany, Switzerland and Italy that have been put together relatively recently as unified nation states. So Oslo, Copenhagen, Stockholm, Amsterdam, Brussels and Paris for example. All dominate their respective country.

It is pretty common in Asia too (e.g. Bangkok, KL).

I would think anti-urban people would be happy about it. It puts all the “bad” (i.e. good for urban people – density, immigrants) stuff in one place that they can then avoid. Don’t they want sleepy little towns where nothing ever changes? Other than bigger roads of course.

Don’t take me as a Auckland bashing Cantabrian but some of your graphs and figures are inaccurate. You are using figures for Auckland that measure the size of Greater Auckland. I have no problem with that and no problem with Auckland being successful. But you haven’t measured Christchurch or Wellington in the same way.

Greater Christchurch includes the towns of Lincoln, Rolleston, Prebbleton and West Melton in Selwyn District and Rangiora, Kaiapoi, Woodend and Pegasus in Waimakariri District. This adds almost 100,000 people to the Christchurch total. More importantly these are the fastest growing places of Greater Christchurch. If you go the NZTA website you will see the fastest road transport growth spot in NZ is the Waimakariri SH1 bridge. Traffic on the 4 lane Waimakariri bridge has reached the same levels as the Auckland Harbour in 1970 the year when AHB got its additional 4 lanes!

Bertaud’s analysis of city sizes within a country is there is a tendency for the second biggest city to be half the size of the first and the third to be one third the size and so on. But within this relative order percentage growth is the same.

I think the difficulty for Christchurch and Wellington and the country is it wasn’t clear which was the second sized city. Gradually despite setbacks like the quakes it is becoming clear the second biggest city is Christchurch.

As a greater urban area I believe Christchurch is heading towards half the size of Auckland.

As a country it has been important not to under estimate Auckland’s growth. By the same logic it is also important not to under estimate Christchurch’s growth. Medium sized cities need support just as much as big cities. I believe for instance the decision not to trial a passenger rail service to relieve pressure on the Waimakariri bridge is based on an under estimation of Christchurch’s growth track. Would the North Shore have turned down passenger rail in 1970 if the cost was only $10million in 2014 dollars?

Brendon, the graphs are for urban areas as defined by Statistics New Zealand. There is a definition of Greater Christchurch thanks to the CER Act (including the entire districts of Christchurch, Selwyn and Waimakariri), but no comparable definitions for other cities. The Christchurch urban area includes Kaiapoi but excludes other outlying towns, the Auckland urban area excludes Pukekohe and other outlying towns, the Wellington urban area excludes Paraparaumu, and so on.
I would agree that the satellite towns around Christchurch are probably more dependent on it than for other cities, in large part due to forced relocations post-earthquakes.
Before the earthquakes, Christchurch and Wellington urban areas as defined by Statistics New Zealand were neck and neck for population (and you’ll also see the same if you look at the urban areas as defined by Demographia, which I’ve generally found to be quite good for the cities I’ve looked at), with Wellington having now pulled ahead.
The Christchurch urban area/ Greater Christchurch grew more slowly than Auckland, Hamilton, Tauranga and Wellington between 2006 and 2013, although it was on a higher growth track than Wellington before the earthquakes. As for what will happen to Christchurch’s growth path in the future, there remains a lot of uncertainty around that, although it’s positive to see that its population is on the rise again. I don’t think there’s any evidence to suggest that it’s likely to grow faster than Wellington, although time will tell.

John I appreciate your reply. I think the towns I discussed – Lincoln, Rolleston, Rangiora, Pegasus etc are more similar to Upper Hut and Papakura rather than Pukekohe and Paraparaumu distance/time wise. If we extended Greater Christchurch to Pukekohe/Paraparaumu distances it would include Amberley, Oxford, Darfield etc.

Personally I think an urban area should count as 1 hour travel time from the centre.

My mum tells me a house is being completed every second day in Pegasus alone. So to exclude these easy commuting towns from Greater Christchurch’s growth figures is highly misleading.

My understanding is the decade before the earthquakes Canterbury’s population growth rate was as high as Auckland’s in percentage terms. 2006 to 2013 census figures are difficult to interpret due to the effects of the earthquakes in 2010 and 2011.

It’s just that there needs to be some consistency in definition, to allow cities to be compared. And the “urban area” definitions are based on fairly contiguous areas of developed land. The definitions can be debated… if you draw the cutoff line at 30 km out (Rangiora etc) then Chch looks bigger, or at 50 km out (Paraparaumu, still only a 40 minute drive) then Wellington looks bigger. An hour is quite a long distance to bring inside an urban area – that’d combine Wanganui and Palmy, or Rotorua and Taupo.
A few grey areas are to be expected though

Yes it is difficult. Another definition of an urban area would be one where every part can be accessed from every other part in 1 hour or less. This matches research that indicates the maximum time people are willing to spend to get to work is 1 hour.

I acknowledge that you needed to use some accepted definition of an urban area : )

If someone from Timaru has just completed a law degree, and wants to move to the city for work prospects, and you tell them they are forbidden from moving to Auckland, what makes people think they will stay put or move to Cambridge, rather than say Melbourne?

Growth has been in the primary sector not Auckland where the economy now largely consists of $2 shops, takeaways and people designing apps. Shock horror! A pulp and paper mill at Kawerau where a huge chunk of trees grow. Freezing works at Patea where for many years there were endless animals for processing. A steel mill at Glenbrook close to which is a shitload of ironsands. Another smelter near Invercargill where the necessary cheap power was to be had. The fact is that these industries operated profitably for decades providing employment for thousands of people and providing this country with a standard of living way higher than we have now.
Go here to see what sustains New Zealand. Auckland doesn’t rate a mention. Neither should it.http://www.mpi.govt.nz/agriculture

There’s a general trend of rural areas depopulating, with the population concentrating in larger cities.

The ongoing trend of higher contraceptive use and reduced birth rates correlates with that… and probably actually *encourages* it. A solitary farm family is one thing if you have 10 kids, but quite different (and rather isolating) if you only have one or two.

You should expect concentration of population in the biggest metro areas no matter what the other trends are: whether immigration is up or down, whether emigration is up or down.